The 21 Million Dollar Kick

Now that Mark Appel saga has passed, the Pirates can re-focus their energies on making a move or two at the trade deadline.  But not only will improving the product help on the field, but it can also have positive financial impacts for the Pirates in 2012 and 2013.

Last year I looked at what each individual fan contributes to the Pirates per game.  The research showed that each person can reasonably be expected to contribute $29.30 to the coffers from their ticket, food, and merchandise purchases (the Pirates get little to no parking revenue from the Sports and Exhibition Authority).

To this point in the season, the Pirates’ average home attendance is 24,882, an increase of 1,852 fans per game.  In 2011, the final average attendance was 24,255, so if the Pirates kept this attendance increase that would be 26,000 fans per game in 2012.  It is reasonable to expect that if the Pirates continue to stay competitive and in the playoff hunt that the attendance will  increase even more, perhaps to a figure around 27,500.  Those extra 3,245 fans would equate to an additional $7.7M in revenue for 2012.

But if the Pirates make the playoffs, there will be additional revenue garnered for each home playoff game.  In the Incremental Value article, the average ticket was $17.07.  Let’s assume that for the playoffs, the average cost will double.  I’m assuming this because this is uncharted territory for me (and the Pirates) on what a playoff ticket will cost at PNC Park.  Let’s keep food and merchandise costs the same.  Using the new ticket cost, the average fan will contribute $44/game.  With the playoff-starved city, it is safe to assume that each game will be a sellout of 38,496 fans.  That means each playoff game will generate $1.7M of revenue.  As long as the Pirates don’t lose the potential play-in game, they will get at least 2 home playoff games, meaning $3.4M to the Pirates.

The third benefit for the Pirates to make a move in order to make a run at the playoffs is the boost in 2013 season tickets.  The excitement from this season, plus a potential playoff run, will boost fan interest in purchasing season ticket packages (partial or full) and single game tickets ahead of time.  The money raised from season ticket packages and pre-season sales is “money in the bank” for the Pirates and will enable them to be less dependent on game day sales.  The excitement from the good-vibe 2011 season caused a 12% rise in ticket sales coming in to 2012.  Let’s say the Pirates could increase the ticket sales by 15% coming off of this hypothetical playoff appearance.  That would be an additional 4,125 fans/game from the assumed 27,500 fans/game.  The revenue from those fans would be $9.8M over the amount from 2012.

Those three forms of increased revenue would total up to $20.9M of increased revenue over and above the 2011 season.  That kick is the form of calculus that will be involved on any go/no-go decision to make a run for the playoffs here in 2012.  The Pirates can capitalize on their on-field success with a shrewd move or two that can also help them increase payroll in 2013.

 

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